Job Market Signaling and Screening: An Experimental Comparison

IZA Discussion Paper No. 1794

CentER Discussion Paper No. 2003-124

42 Pages Posted: 25 Oct 2005

See all articles by Dorothea Kübler

Dorothea Kübler

Social Science Research Center (WZB); Technische Universität Berlin (TU Berlin) - Faculty of Economics and Management

Wieland Müller

University of Vienna, Department of Economics & VCEE; Tilburg University, Department of Economics & CentER

Hans-Theo Normann

Heinrich Heine University Dusseldorf - Department of Economics; Max Planck Institute for Research on Collective Goods

Date Written: October 2005

Abstract

We analyze the Spence education game in experimental markets. We compare a signaling and a screening variant, and we analyze the effect of increasing the number of employers from two to three. In all treatments, there is a strong tendency to separate. More efficient workers invest more often and employers bid higher for workers who have invested. More efficient workers also earn higher wages. Employers' profits are usually not different from zero. Increased competition leads to higher wages only in the signaling sessions. We find that workers in the screening sessions invest more often and earn higher wages when there are two employers.

Keywords: Job-market signaling, job-market screening, sorting, Bayesian games, experiments

JEL Classification: C72, C73, C91, D82

Suggested Citation

Kübler, Dorothea F. and Müller, Wieland and Normann, Hans-Theo, Job Market Signaling and Screening: An Experimental Comparison (October 2005). ; CentER Discussion Paper No. 2003-124. Available at SSRN: https://ssrn.com/abstract=556963

Dorothea F. Kübler (Contact Author)

Social Science Research Center (WZB) ( email )

Reichpietschufer 50
D-10785 Berlin, 10785
Germany
40 30 25491440 (Phone)

HOME PAGE: http://www.wzb.eu/mp/vam/people/dorothea_kuebler.de.htm

Technische Universität Berlin (TU Berlin) - Faculty of Economics and Management ( email )

D-10623 Berlin
Germany
+49 30 31425263 (Phone)

HOME PAGE: http://www.wiwi-experimente.tu-berlin.de/

Wieland Müller

University of Vienna, Department of Economics & VCEE ( email )

Oskar-Morgenstern-Platz 1
Vienna, A-1090
Austria

HOME PAGE: http://https://homepage.univie.ac.at/wieland.mueller/

Tilburg University, Department of Economics & CentER ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

HOME PAGE: http://www.tilburguniversity.edu/webwijs/show/w.mueller-3.htm

Hans-Theo Normann

Heinrich Heine University Dusseldorf - Department of Economics ( email )

Duesseldorf
Germany

Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

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